ABB to exit solar inverter business

ABB and Italian company FIMER
S.p.A have announced they have signed an agreement for FIMER to acquire ABB’s
solar inverter business.

According to ABB, the transaction
will enhance the future prospects of the solar inverter business and will
enable ABB to focus its business portfolio on other growth markets.

ABB’s solar inverter business has approximately 800 employees in more than 30 countries, with manufacturing and R&D sites located in Italy, India and Finland. It includes the solar inverter business from Power-One, which was acquired by ABB’s Discrete Automation and Motion division in 2013. The business offers a comprehensive portfolio of products, systems, and services for different types of solar installations. It is currently within ABB’s Electrification business and achieved revenues of approximately $290 million in 2018.

Both companies have stipulated
they will ensure a smooth transition for customers and employees.

FIMER will honor all existing
warranties and ABB will compensate FIMER for taking the business and its
liabilities over.

As a result, ABB expects to take an after-tax non-operational charge of approximately $430 million in the second quarter of 2019 with the half-year results of 2019 being impacted accordingly. Around 75 per cent of this charge is represented by cash outflows ABB will pay to FIMER from the deal closing date through 2025. In addition, ABB expects up to $40 million of carve-out related separation costs starting in the second half of 2019.

After closing of the transaction,
ABB expects the operational EBITA margin for the Electrification business to be
impacted positively by slightly more than 50 basis points, supporting the
business’ progress towards its target margin corridor of 15-19 per cent.

Completion is expected in the first
quarter of 2020 and will be subject to certain conditions, including the
completion of the carve-out and prior consultation with employee representative
bodies.